Retention is really, really important. In fact, Hubspot’s 2018 State of Inbound report stated that 61% of respondents noted “generating traffic and leads” as their main marketing challenge. But I’m wondering, as a marketer myself, what makes us think that user acquisition is more important than trying to improve the retention rate? I mean, according to research from Bain & Company, a 5% increase in retention can increase profits by 25%-95%. Those are incredible figures, yet we still put a majority of our efforts on trying to increase customer numbers and not customer value. Keeping your existing customers happy, loyal, and active is something that should always be in the forefront of a marketer’s mind.
Below are the 5 main reasons why customers churn and tips on how to proactively control the situation.
Bad Customer Support
“68% of customers leave because they are unhappy with the service they receive.”www.allbusiness.com
This is the biggest reason why customers churn, even more than price. And this is fantastic news! Why? Because it’s a lot easier to control our customer service than it is to adjust our pricing and business model on the fly. And a small effort from any marketer can mean a huge boost in business. Train your customer support team well. Don’t just feed them lines. Make sure they understand the product, the use cases of who they are speaking with, and the responsibilities of that person. It will be easier for them to give the customer better attention and more focused service that way. And people like efficiency.
- Address your customers by name
- Provide fast support
- Be personalized and don’t rely on generic auto responses
- Follow up after an issue is solved
- Give your customers a way to provide feedback
Didn’t Reach Their Goal with the Product
Okay so this is a little tricky because there is a fine line between the product’s responsibility and the customer support area. The product could be created in a way that just doesn’t make sense or is not compatible with the end user. Or it could be that the onboarding process is simply too weak. It doesn’t matter and the end user doesn’t care. All they want is to experience their first success with your product so they can believe it and begin engaging with it more. In short, if you don’t deliver them your promise and their end goal you can start organizing your breakup playlist because they’ll be walking out that door with no regrets. And how do you do this? With all around support, information, and guidance.
- Create information and resources to help guide the learning curve
- Onboarding emails with links to guides and knowledge base
- Understand the goal of each user and provide them with the appropriate content
- Uncover where challenges lie both in the onboarding and in the product
Competition Looks Better
Baby, the grass is always greener on the other side. And customers are always looking for a good deal, even if it means leaving your business. Sometimes it’s stuff that’s a little harder to be agile with, like pricing, but sometimes it’s things that any marketing manager can control. For example, you can use marketing intelligence tools to uncover what campaigns, promotiongs, and discounts they’re offering. See what’s working from them and what’s not. And with these insights you can build off their success while avoiding their failures, helping you save costs and bring in revenue.
- Offer them incentives
- Uncover what your competitors are doing and copy what works
- If you can give them a discount, do it, it will save you in the long run
- Figure out what your real unique selling points are or differentiators and leverage them
- Offer superior service
Bugs and Disruptive Glitches
Ok, so bugs and glitches happen to us all. And it doesn’t matter what industry you’re in. But the thing I’ve learned is that people are a lot less angry about disruptions in a product or service if you just come straight forth and say, look there has been a mess up, we apologize for the inconvenience and here is some free stuff to cheer you up. Or even better, if you actually notify them ahead of time. Reward your customers if you’re the problem. And communicate with them to let them know what is happening on your side: you know certain problems, your team is working very hard on fixing them, etc.
- Reward your customers when you’ve inconvenienced them
- Warn your customers ahead of time if you know there will be a disruption
- Take responsibility for disruptions and apologize. It doesn’t cost anything.
- Get customer feedback to see if there are glitches you are missing and can fix so it won’t happen in the future
Missing Product Market Fit
Your marketing team has done terrific work in bringing leads in. Sales is on fire signing them up for demos, trials, and contracts. They go to use the product and it’s nothing like they expected. But this time it’s not all on product and customer support. They’re applying all those aforementioned tips in this article. This time it’s on sales and marketing because they’re either not selling the actual product or the leads they are bringing in aren’t truly qualified. Either way, in a few weeks or months that customer will leave you because there is no product market fit here. So stop selling to the wrong customers.
- Create a well defined buyer persona
- Understand the pains and challenges of your buyers
- Understand their use cases and how the product can be used to fulfill their goals
- Sell the truth. What the product actually does
Keeping your current customers engaged, happy, and loyal is very important. It’s also really tough. But luckily all of these tips can be applied to your actual retention strategies and tactics. So the next time you’re debating on where to spend those last few dollars, acquisition or retention, remember this: People may come in for the food but they stay for the service.